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The Chinese car market is changing fast, with domestic brands making up a larger share of the local market. In 2000 these domestic brands made up 18% of total sales, whereas in 2010 forecasts show this to be about 32%, with the share increasing in future years. In a rapidly growing market this did not make much difference, but with the market growth moderating to 7-8% in the next ten years from the heady 33% of recent years, the foreign brands such as GM and VW will not see the growth of recent years. J.D. Powers projects passenger vehicle sales in China at 19.2 million by 2017, with Chinese brands taking 45% of the share, in one scenario. Under this scenario foreign brands like GM and VW would see sales growth of only 5% in the next 7 years. The foreign brands are not allowed to own more than 50% of local operations. And their partners are making their own domestic brands. If Japan is a useful example, China's automobile companies will like Nisssan, Toyota, and Honda, proceed to penetrate global markets and become a dominant player in their local market. This has implications for GM, VW and Daimler....

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Reilly raises the question why asset allocation decisions of the type made by JP Morgan Chase since 2008, does not make it similiar to a mutual fund or a hedge fund, and why this should itself not be considered a form of proprietary trading. JP Morgan Chase had $600 million of corporate debt in its overall debt portfolio or 1% in 4th quarter 2006. By end of 2008 this increased to 5% or $10 billion. By end of 2009, this went up to 17% of the portfolio or $62 billion, and they are at that level today. The holdings of non-U.S. residential mortgage securities was also increased, going up to 20% of holdings or $75 billion at end of 1st quarter 2012, from $2 billion or 1% of the portfolio in 2008. Corporate debt holdings at Bank of America at the end of the 1st quarter of 2012 were about 1% or $2.4 billion, and at Citigroup were about 4.5% or $12 billion. The Chief Investment Office unit of JP Morgan handles this portfolio, which is the result of deposits of $1.12 trillion exceeding loans of $700 billion. The low interest rate environment after 2008 creates incentives for banks to look for ways to improve crimped margins and in the process adding risk....

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Microsft acquires Skype for $8.5 billion. EBay bought Skype in 2005 for about $3.1 billion, then took a charge of $1.4 billion for the acquisition in 2007, after failing to make a fit for it in EBay. Only 18 months ago EBay sold a 70% stake in Skype to a group of investors led by private equity firm Silver Lake Partners. That deal valued Skype at $2.75 billion. This suggests that Microsoft's Steve Ballmer is paying a steep price for Skype. This is especially true because Skype has failed to bring in many paying customers. Losses were $7 million last year. Skype has 170 million users but most of the calls are made free between computers. Increasingly its use is as an app on smartphones so that users do not have to pay higher fees to wireless carriers for calls. How Microsoft integrates Skype into its own products and how it makes the acquisition work is a challenge for Microsoft. Because of Microsoft's purchase, EBay will end up making $1.4 billion profit on Skype. Skype is based in Luxembourg, and Microsoft will use cash it holds overseas for the acquisition, money that could not be repatriated to the U.S. without paying taxes of more than 30%....

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U.S. president Obama's passive response in the handling of the NSA spying on the phones of world leaders including the president of Brazil and the chancellor of Germany comes under criticism in the U.S. The failure to provide adequate assurance- and take immediate action since the summer of 2013 when the first revelations of NSA spying were out- to regain trust of European and other leaders is seen as a weakness in leadership. With German presidential elections approaching German chancellor Merkel actually tried to tone down the initial uproar over NSA spying revelations in the summer of 2013. It was only after it was revealed in October 2013 that NSA had monitored Merkel's mobile phone did the chancellor make an issue of this and Obama could not respond to why no action had been taken since the summer and a complete review of NSA spy activities made by the President and advisors. Because world leaders are involved, and not just of allies but large emerging market nations such as Brazil, this becomes the personal responsibility of the U.S. president. Obama also comes under criticism for not responding to the failure of the healthcare website. This matter is of a different nature and could be handled by the President's Health and Human Services Secretary, Ms. Sibelius....

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Britain's David Cameron leads the successful effort to hold down spending in the European Union's next 7 year budget plan, supported by Germany and the Netherlands. The new 2014-2020 EU budget plan holds down government contributions to the budget to 959.99 billion euros. There is a 35 billion decrease from the last budget plan after adjusting for inflation, and less than the 1.03 trillion euros proposed by the European Commission, the EU's executive body. Actual spending is set at 908 billion euros compared to 943 billion euros for 2007-2013. Cuts were made in some areas- direct subsidies to farmers went down to 277 billion euros from 337 billion euros. EU funding to tackle high youth unemployment and build transnational infrastructure increased 37% to 126 billion euros. Funds allocated for investment projects in poorer regions slightly declined to 325 billion euros. Special rebates to the UK and the Netherlands remain- the Netherlands rebate is 1 billion euros. The mood of European leaders was summarized in the words of Britain's prime minister Cameron: "Frankly, the European Union should not be immune from the sorts of pressures that we have to reduce spending, find efficiencies and make sure that we spend money wisely that we are all having to do right across Europe."...

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Fears that nuclear facilities that are spread out thoughout the country of Pakistan could fall into Taliban hands. Especially one scenario in which the nuclear facility is moved and an insider tips off the Taliban, later it is taken by Taliban as it is being transported. Even as the terrorism increases in Pakistan, the country is continuing to produce more plutonium and more nuclear reactors. An estimated 70 to 100 nuclear weapons are located in Pakistan. Americans gave $100 million for securing these facilities and for security, but have no idea where that money went. And when it comes to the nuclear facilities the USA has no idea where they are, and is facing a dead end of "don't worry" from Pakistani military officials, increasing the concern from the Americans, as the same assurances were made about the sale of nuclear technology by Pakistani scientists in the black market. These claims turned out to be true. This time the US is not about to take any chances, and the Pakistani military is loath to disclose more information about the location of nuclear facilities, because the US may blow them up if the Taliban are seen as a threat to those facilities....

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Mayo Clinics 18 month long effort with 400 health policy experts working on the panel has a set of recommendations for the Presidential candidates. It suggests a private system with private insurance companies offering many options and nobody can be turned down. Those least able to afford it would get government help, individuals would pay for the insurance with some help from employers. Since once insured its not dependent on employer its permanent, changing a job would make no difference at all. Interestingly most of the panel experts cited here from Verizon, the Heritage Foundation and others all agree that the present system is coming to a close and a new one has to replace it with coverage for all Americans and a privately based system with contributions made by society and government, by all individuals, and also by employers. Mayo's study, the breadth of the number of experts participating (400 experts), the length of time to understand and come up recommendations (18 months), the respect the institution has among all sectors and groups, should give the consensus view of experts in the US, so that any future health plans do not simply get derailed by partisan opinion, controversy and lobbying....

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Chinese are saving for the future as there is no safety net, no social security and no welfare or food stamps.And this means there will be a strong cutback in consumption and in sales of most products in China. Even before this global economic crisis China was becoming even more export oriented. In the last decade consumption as percentage of GDP actually declined from 47% to 37%. And the $586 billion stimulus has some measures to boost consumption but most of the money will go to infrastructure like new highways, railroads and airports. Housing construction is coming to a halt with home prices down 15% in Shenzen. And layoffs among exporters in the area north of Hong Kong like Li Kai which made 9 million sneakers for New Balance in 2007 will make 7 million in 2008, and is laying off 22% of its workers. Migrant workers are headed back home. The sales of foreign firms will be affected. GM's Buick brand saw sales decline an estimated 12% this year and JD Powers estimates decline in 2009 by 21%. Researcher BDA China sees cell phone sales down to 9% growth each year for next 5 years, down from 30% increases in the past 5 years....

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It is not just in the US that statistically inflation is receding. In the UK prices were down 0.3 percent or three tenths of one percent this year in August compared to last year.Yet make no mistake lower income families and students in the US and in the UK, and in Germany and France across Europe are living from paycheck to paycheck, or simply struggling to make ends meet.This is the problem that Starmer in UK and Biden-Harris Harris-Walz now face with the need to bring housing and food prices down and hold them in check to improve the lives of students, working people.

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Institutional landlords are concentrating investment in 53 zip codes that offer the highest potential for quick returns. This is pushing up prices in neighborhoods and is likely to make it worse. The average home price is understated compared to rental income, the average home price in these zip codes where family homes make it profitable is $345,000 a fifth below national average, and rents only 3% below the median, presenting profit opportunity.

Home prices in these 53 zip codes went up 64%, compared to 48% nationally. Median rent went up 30% in these 53 zip codes compared to 23% nationally, Zillow shows.

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The yield on Italy's two year bonds reached 7.269% on November 9, 2011. Italy needs to rollover $300 billion in debt over the next 12 months. And liquidity is becoming a serious problem as investors become cautious about buying Italian bonds. Investors who were attracted to the higher yields on Italian bonds now see the market as too unstable to make purchases. Peter Schaffrik, head of European rates strategy at RBC Capital Markets in London, says that the Italian bond market, the third largest in the world, was quite liquid, with investors buying or selling 500 millon euros of Italian bonds at a clip. Now, he says, its hard to trade more than 50 million euros. The only hope is to get enough stability and confidence back into the market, as Italy is too large for any rescue effort by the ECB, IMF or the EFSF. With some stability Black Rock's Fundamental Fixed Income portfolio's chief investment officer, Rick Rieder, says Italian bonds are something he would buy.

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One negative effect of the trade war with the U.S. is an increased emphasis on energy security and increased use of coal in China. After China committed to goals for climate change coal use declined in 2014, after reaching a high in 2013. The attack on Saudi oil facilities showed risk in its reliance on Saudi oil. China's import dependency for oil reached an all time high of 72% in 2018, according to BP 2019 Statistical Review. Gradually the commitment to climate change and lower use of coal has changed since 2016 with the withdrawal of the U.S. from the Paris Climate Change Agreement. Initially after the U.S. withdrawal under president Trump China made bold commitment to lead the fight against climate change but has since wavered. In an October 2019 speech Premier Li Kequiang called for the development of the coal industry to ensure energy security.  As China's economy slowed in 2019 in the face of U.S. tariffs and a trade war with the U.S. efforts are being made to increase infrastructure investment which has driven coal use higher. China's steel output reached a record of 750 million metric tons in 2019. The amount of coal fired capacity under construction in China now exceeds the rest of the world combined, much of it from plants permitted before 2017, according to Global Energy Monitor. China is also expected to become the world's largest importer of natural gas by 2020. Even the Russian gas fields from Siberia supply only a fifth of China's energy demands in 2020.  China has made large strides in renewable energy helping it meet its Paris Agreement targets. Renewable energy is about 10% of China's energy mix, but its use showed growth of 29% in 2018, making up half of the world's growth. China's use of coal in the energy mix has dropped to 58% in 2018 from 72% in 2008, according to BP 2019 Statistical Review, as a result of renewable energy investments. At the Madrid Climate Conference China renewed its commitment to the Paris Climate Change Agreement. Now it is a balancing act keeping in mind energy security and economic growth along with the need for clear skies and better air quality. ...

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The Leviathan gas field, 84 miles from Israel's northern coast and three miles below the Mediterranean seabed, is the largest deepwater gas find in the last ten years, estimated to contain 16 trillion cubic feet of gas. Houston based Noble Energy is an independent oil company that is operating the field. Before this find the US Geological Survey had released its first assessment of the zone- the Levant basin stretching offshore in the Mediterranean- estimating that it contained 1.7 billon barrels of oil and 122 trillion cubic feet of gas. This is equal to half the proven reserves in the US. Before this find Israel had failed to find much oil and gas and big oil and gas companies had stayed away not wanting to disturb relations with Arab and Iranian partners. Because of a 1952 petroleum law, Israel offers very attractive terms to oil companies such as Noble, with low royalties and low corporate taxes on exploration. Now the Israeli government is considering changing the terms retroactively on previously assigned leases. In November 2010, Finance Minister Steinitz says a government appointed committee has made preliminary recommendations to abolish tax breaks for energy firms and impose tax increases of 20% to 60% on windfall profits. Israel's Securities Authority has also started to clamp down on trading irregularities, and raided the offices of two enegy exploration companies. Rumors of big finds have set off a speculative frenzy in Israel's stock market. The energy index of the Tel Aviv stock exchange went up by 1700% in 2010, and energy stocks account for half of the activity on the exchange. ...

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Questions raised about reservation processing charges for national parks for over $100 million that go not to the National Park Service work or activities for keeping up park trails but to a private company Booz Allen. Park goers question whether the government negotiated a payment structure that is in the public's interest, says this WSJ report. The park does not charge for using the park when making a reservation on site Recreation.gov. Yet the government pays $2 for every park reservation made on that site to Booz Allen, a private company.

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A former Interior Secretary Bruce Babbitt says the Interior Department needs to take up authority it has for contract approval on use of water by individual entities in the states of California and Arizona. The department can look at how efficiently water is being use to give approval. He suggests this approach as the states of California and Arizona are nowhere near agreement on use of water from the Colorado river. Babbitt says there is risk of deadpool where the water in Lake Mead drops to levels that make water to stop running from the lake downstream to Arizona and California.

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Margrethe Vestager, Danish regulator returns as head of the anti-trust division of the European Commission for a second five year term, just as tech companies are increasingly seen as having unfair business practices that do not benefit society as a whole. One change she hopes to make this time is to use "interim measures" a cease and desist order for companies to stop improper behaviour immediately, rather than go on with investigations for years. These investigations end up with fines but not the structural changes to enforce competition that are immediately needed.

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The situation in Brazil for empregadas or domestic workers is similar to the situation in India, two of the hardest hit countries by coronavirus. Domestic workers played a large role in Indian homes in cities, and in Brazilian cities. With the dangers of virus spread and social distancing many of the domestic workers are kept away and homes are now cleaned, meals cooked, by the homeowners. Some empregadas are finding other ways to make a living by preparing meals and selling them or providing them to homes they worked in. Domestic workers in India are also doing this.

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Mr. Tom Tugendhat, chairman of the select committee on foreign affairs, a Tory MP, says UK companies are vulnerable to takeover by foreign state backed entities and calls for new laws to protect British companies. Prime minister Boris Johnson is preparing to announce new laws that will make it mandatory for British companies to report to the government when any foreign company attempts to take over 25% of the shares in a British company, or which could pose a security threat, with strong sanctions. Failing to do so would have directors jailed, disqualified, or face large fines.

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"Made in China 2025" is a plan by China to build competitive companies in new technology industries such as advanced microchips, driverless cars, robotics. This is one area in which there is a huge difference in trade matters more than the tariffs issue, because the U.S. sees this as an effort to dominate these industries with state subsidized loans at low interest rates. The Trump administration has threatened to impose 25% tariffs on imports from China in these industries to protect U.S. companies. The U.S. insists there should be a level playing field for U.S. companies.

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The 2019 election recorded the lowest turnout in Nigeria's history. Voting was especially low in the south where opposition candidate Abubakar was ahead, and much higher in the north and northeast which has consistently supported president Buhari. This BBC report says voter apathy seems to have set in. In the north Buhari is seen as a principled man of the people helping him get a lead of 4 million votes. Even though security concerns have affected about 2 million people in the north from Boko Haram militants the INEC made provision for 400,000 displaced people to vote. 

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After mentioning the transformative game of Van Dijk, Sadio Mane, Firmino, Alexander Arnold, one can only turn to the incredible resilience of Jordan Henderson against many setbacks and being written off more than once. Here he is put forward as the choice for Footballer of the Year. Precept and example counts for more here than individual game performance.

The "mentality monsters" Germany's Klopp talks about in coaching is about calming the mind and continuous improvement, hard work in practice that makes this happen. Henderson shows a lot of this work ethic and resolve.

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Kurzabeit is a big part of the social safety net in Germany. It means short time work. When companies face a loss of orders or production or some crisis workers still get paid 60 to 67% of their wages. This avoids layoffs and benefits both employees and the company, as the company can quickly ramp up its production to full capacity with employees working full time. Workers make up for the work lost once the crisis has passed. 

This has enabled Germany to keep the unemployment rate low as in the 2008-2009 financial crisis.

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Former Texas Senator Kay Hutchinson, America's new ambassador to NATO, offers this spirited defense of NATO in an NYT op-ed. She points out that when it comes to European defense and need to revitalize NATO there is no difference between president Trump, Rex Tillerson, Gen. Jim Mattis at the Defense Department, and senators of the Republican and Democratic parties. Rex Tillerson, U.S. Secretary of State, made a similar statement by visiting a war memorial in Italy recently. Chancellor Merkel has made similar statements in her visit to the Baltic Republics. Behind the revitalization of NATO remains another goal to spread the burden of defense evenly so that the U.S. is not bearing a disproportionate responsibility.  Here Hutchinson reminds readers that if all 29 NATO members met the 2014 defense spending pledge - to spend 2% of GDP on defense and 20% of each defense budget on modernizing capabilities- $100 billion in defense funding would have been created for 2016. Hutchinson says the European Defense Initiative will be funded with $4.8 billion for strengthening defenses in Eastern Europe. NATO Secretary General Stoltenberg is taking the lead in ensuring NATO funding goals are met. ...

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What a shock to know the city that lost its soul, and is described in Luke Bergmann's "Getting Ghost," with no jobs or hope for black teenagers ,neither in the public schools or in jobs where they can be productive. With the streets ridden with drug dealers and violence. Arab Americans run the small businesses, and what little businesses there were dimmed with the 1967 riots. And yet in the post war period right up to the recent years, Detroit was the center of the automobile industry, with its huge number of jobs in assembly plants and in auto supplier plants. That such two worlds could coexist together side by side, is itself as shocking to an outsider as the earlier story of black people in America. Drop out rates for black male teenagers at 75% before graduating in the Detroit public school system. And unemployment rates for black male teenagers approaching 30-40% in the city according to some reports. And with the situation the way it is, the country enters a period of great economic difficulty with unemployment growing in the Detroit area....

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A Toyota panel recommends having foreign directors to reduce the insularity of the headquarters management in Japan. This remains a problem not addressed by recent changes that made the Board of Directors smaller for closer interaction. This makes management and the Board less responsive in dealing with situations like the recent crisis based on safety issues in Europe and the U.S., which occur in a different cultural and media context.